Uber and Ola slug it out : All’s fare in the cab wars

There’s nothing new about the plot. A business sector that has seen rapid growth eventually sees some consolidation, and the big hitters slowly but surely start to nudge each other. While it might start with experimental forays into each others territory, it will not take long before the fight is out in the open, and becomes a full blown war. This time round, the two gorillas slugging it out in the ring are the big daddies of cab hailing services in India – Ola and Uber.

With both wanting to establish superiority, Ola and Uber have been trading blows with their claims and counter-claims as to who owns how much of the market. When the stake is a pie that is supposedly worth over $9 billion in a few years, it comes as no surprise that they are engaging in all manner of skulduggery to try gain the upper hand. In the most recent development on this front, Uber has dragged Ola to court citing attempts it has carried out to mislead its drivers by initiating fake bookings through bogus accounts. In what is going to balloon into an all out war, Uber claims Ola is resorting to such practices to undermine its service, and is claiming a loss of over Rs. 50 crore due to this. Ola has brushed off the charges. The shakedown and press wars are likely to continue until September, by when Ola has respond to Uber in court. Both companies have been citing outrageous numbers while claiming market shares. Given there is no independent agency that tracks sales of consumer Internet companies, there is no easy way to ratify or refute these claims.

The cab aggregation market has been growing by leaps and bounds

Both Uber and Ola make 90% of their money from the top 20 cities in India – where both players have a presence. Both of them are blue-eyed boys in the world of consumer Internet companies, with Ola being India’s third biggest company, and Uber being the current darling of the world. Given the numbers both are quoting, they also share the risk of losing face if facts are contrary to what they report. With market share being computed from different sources – from number of drivers and cars on these platforms to the usage rates and revenues, there really is no way to ensure a fair comparison between the two players – unless carried out by an independent entity.

While Ola may not match up to Uber in terms of what they’re valued at, it certainly seems to have the upper hand in India in terms of market share. Ola claims to own over 80% of market share, with their new cheaper service Ola Micro growing faster than they’d imagined. Apparently, what Ola grew to in 3 years, Ola Micro achieved in 3 weeks. Given current growth rates, Ola claim that their Micro service alone will eventually be bigger than Uber in India. Of course, the market has been maturing and today they certainly address a bigger audience than when they started. Ola claims to have achieved a ten-fold growth in the number of rides it performs on a daily basis across categories.

Gone are the days when one would have to hail a cab

Uber came into the country trying to replicate their global models, but then quickly realized that they would need to innovate for India if they were to gain a foothold. They quickly brought in India specific approaches – accepting cash payments unlike in other countries, and also doling out huge incentives to drivers to rapidly grow their fleet size. They lay claim to about 50% of the market today, and also say that they will beat Ola shortly. These are not claims to be taken lightly, given Uber is valued at over 10 times what Ola is, and if it comes down to spending money, they will be able to outrun Ola very quickly.

Both players have tried to make inroads with various attempts – from offering additional delivery services to segmenting into premium and regular. Uber has Go, Pool, X and XL, while Ola has a wider range – with Mini, Prime, Share, Autos, as well as the recent addition Micro. Both have also been dabbling with the idea of introducing two wheeler taxis, for faster commutes in the city.

Keep with the times. Don’t just hail. E-hail!

The app based transport business certainly is a big pie that’s on the table, and everybody wants a part of the action. The allegations are flying thick now, with claims of false bookings, false accounts and employee poaching. Ola in turn had taken Uber to court alleging they were deploying diesel cabs in the national capital despite the High court order banning the same. With both biggies stocked up on plenty ammo and taking turns to fire silos, this is one war that doesn’t seem likely to end anytime soon. We’re not complaining, given it can only mean great offers for the average consumer – at least as of now.